Tags: GE Capital Midsize Companies Plan 6percentWork Force Growth

GE Capital: Midsize Companies Plan 6% Work Force Growth

Tuesday, 17 May 2011 10:29 AM EDT

Small and midsize U.S. companies plan to increase their workforces an average 6 percent in the next year as confidence strengthens in an economic rebound, according to a survey by General Electric Co.’s finance unit.

The survey, whose results were released today, reflects data from chief financial officers at 530 companies with annual sales of $50 million to $1 billion, according to GE Capital, one of the biggest lenders to small and midsize U.S. companies since the financial crisis. About 80 percent said they plan to hire more workers, and almost two-thirds have already started.

“Eighty percent planning on hiring was a pretty bold statement,” said Dan Henson, who oversees GE Capital in the Americas, including the commercial lending and leasing unit. “This was the most definitive we’ve seen in the three times we’ve done this survey.”

The survey results match a March increase in job openings, according to the U.S. Labor Department. The number of positions rose by 99,000 to 3.12 million that month, the most since September 2008, data showed. Payrolls climbed in April, expending the longest string of monthly gains since the 2006- 2007 time period.

The planned hiring increases come as 72 percent of finance chiefs surveyed expect year-over-year sales growth in 2011, up from 64 percent in January 2010, GE Capital said. Industries included in the report were metals and mining; food, beverage and agriculture; general manufacturing; health care; retail; technology and business services; and transportation.

Raw Material Prices

Extracting profit from the higher sales may be the biggest challenge this year, with raw material prices rising 32 percent in the past 12 months, according to the Standard & Poor’s GSCI index of 24 commodities.

About 40 percent of finance chiefs expect profit margins to widen in 2011, and 42 percent projected they would stay the same, GE Capital said. The unit’s parent company is based in Fairfield, Connecticut.

“The perspective seems to be shifting that margins are going to be stable, even with more investment,” Henson said.

Metals and mining executives were the most optimistic, with 59 percent projecting wider profit margins, a potential indicator of their ability to pass on rising commodity costs to customers, GE Capital found.

Of all executives surveyed, 59 percent expected to be able to raise product or service prices this year, with 78 percent of the transportation group planning to do so.

Capital Spending

About 36 percent expect to increase capital expenditures, the data showed, up from 28 percent a year earlier.

About 53 percent of finance chiefs expect acquisitions in their industries to increase this year. Transportation executives were the most confident, with 65 percent projecting such activity would climb.

The GE Capital Commercial Lending & Leasing unit is being buoyed by the trends, gaining market share amid fewer competitors, Henson said.

The unit’s “overall volume for the quarter was up 83 percent, and our second quarter is looking even stronger,” Henson said. “We’re pretty highly targeted. Our pipeline is the highest it’s been in years in terms of potential transactions. The spend is out there.”

In the first quarter, the commercial lending unit more than doubled its profit to $554 million from $232 million a year earlier, on $4.61 billion in revenue. The division had $197.5 billion in assets as of March 31, according to GE’s quarterly filing with the U.S. Securities and Exchange Commission.

CFOs were interviewed in 30-minute segments using data from Dun & Bradstreet Corp., the Short Hills, New Jersey-based business information and database provider. The respondents weren’t necessarily GE Capital customers.

© Copyright 2024 Bloomberg News. All rights reserved.


Economy
Small and midsize U.S. companies plan to increase their workforces an average 6 percent in the next year as confidence strengthens in an economic rebound, according to a survey by General Electric Co. s finance unit.The survey, whose results were released today, reflects...
GE Capital Midsize Companies Plan 6percentWork Force Growth
589
2011-29-17
Tuesday, 17 May 2011 10:29 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved